- 56% of pending orders in the 100-pip range are to BUY
- SWFX market sentiment is 53% bearish (-2%)
- Strong resistance near 1.4150
- Upcoming events: British Current Account, UK Final GDP q/q, UK Net Lending to Individuals m/m, US Core PCE Price Index m/m, US Personal Spending m/m, US Unemployment Claims, Chicago PMI, Revised UoM Consumer Sentiment
The Pound tests the bottom boundary of a four-week channel near 1.4050.
The Greenback strengthened against the Euro, following the US final gross domestic product data released on Wednesday. The EUR/USD currency pair lost only two pips, or 0.02%, in the first minute after the release, to continue fluctuating in the 1.2385 area.
The Bureau of Economic Analysis revealed higher final GDP in the Q4 2017, however the market remained almost unchanged. The Bureau of Economic Analysis reported a growthof 2.9%, surpassing the expectations and following a 3.2% growth rate recorded in the previous period. One of the main reasons for the US economy to expand more than forcast is the increase in consumer spending.
British Current Account for 4Q2017
The economic calendar includes several fundamentals from both the UK and the US. The British Office for National Statistics is set to release the Current Account and the final GDP for the fourth quarter of 2017. Analysts' estimate for the former is a contraction of 24.0B, compared to a drop of 22.8B during the preceding quarter. In addition, the BoE is to publish its Net Lending to Individuals during February.
The rest of data come from the United States. The Bureau of Economic Analysis will publish the Core PCE Price Index and the Personal Spending in February at 1230GMT. The weekly unemployment claims are also released at the same time. The Chicago PMI and the Revised UoM Consumer Sentiment are to be published at 1345GMT and 1400GMT, respectively.
GBP/USD more bullish today
Downside risks dominated the GBP/USD exchange rate on Wednesday. The failure to surpass the 55-hour SMA early in the session was followed by a decline in price. This bearish momentum was strengthened mid-session in response to solid US GDP data. The market reaction to this fundamental release was limited 40 pips.A southern breakout of the 200-hour SMA, the monthly R1 and the weekly PP could point to further decline within this session. Downward potential is until the 1.40 mark.
Conversely, oversold technical indicators suggest the opposite. This bullish scenario is likewise reinforced by the fact that the Pound has reached the bottom boundary of a four-week channel circa 1.4090. In case the 1.41 area is breached, the pair is likely to struggle near the 55– and 100-hour SMAs at 1.4150.
Hourly chart
The Sterling has been appreciating gradually against the US Dollar since the beginning of March – the movement which has been guided by the 55-day SMA. It seems that the pair might still show some upside potential towards the 1.44 area this week.
Daily Chart
The SWFX market sentiment remains bearish with 53% short positions (-2%). Meanwhile, the number of pending orders is at equilibrium today.
The number of short positions of OANDA traders has decreased to 54% (-4%). Saxo Bank clients share the same percentage of short positions today.
Spreads (avg, pip) / Trading volume / Volatility